How Will ANSI Measurement Standard Going to Improve Appraisal Accuracy?

[Zoe]

Interior SF based on Matterport scans is what is going to be standard for comparison purposes in the future. It will be the most widely used method of calculating structure size of buildings. No question about it.

Somebody might not like matterport scanning their room. You ain't from the south are you? LOL

 

[Dale Floyd]

Seems some rumor that ANSI standard will soon be required by Fannie Mae, et al. There was apparently some discussion thereof at the AARO conference recently. Seems to me that unless assessors, Realtors, builders and Architects also measure by the same standard, what's it going to help? False accuracy if you measure by ANSI but the comps are measured by different people, assessors, agents, etc. And how do you apply the ANSI standard on desktops, hybrids and 2055s? Inquiring minds want to know.

I think this is the information referenced by the OP. Pages 39 - 42.

All of it is an interesting read.

https://aaro.net/AARO/files/71/71057440-c5c3-484e-a337-97d10ccf1111.pdf

 

[Zoe]

I think this is the information referenced by the OP. Pages 39 - 42.

All of it is an interesting read.

https://aaro.net/AARO/files/71/71057440-c5c3-484e-a337-97d10ccf1111.pdf

Great post!

It's discloses many things I have not seen lately. ANSI was in there.

There are several appraisers pushing it hard. I didn't know how many states already require it. There are several states where it is already mandatory to use ANSI

 

[Zoe]

From what I heard, there were two appraisers on the committee that developed the new ANSI standard, and they fought the others hard to make the final standard because the non appraisers were wanting to include the outside walls on the rooms where there is no outside wall. The two appraisers said no. That's fine if there is an outside wall, but not on the walls where there is no outside wall. They had multiple letters from appraisers addressing the committee.

I have been adding for outside wall in those rooms with all the other ceiling heights and limitations. I have added like 4.5 inches on each wall and taking the other ceiling heights and other limitations into play for GLA. I don't have to do that anymore. Ceiling heights and other limitations still apply to GLA. Typical 2 x 4 construction here has about 4.5 inch wall width. I would include outside wall width in a room if it had a outside wall and interior walls. The way the non appraisers were proposing, it was going to mess things up according to sources.

Have to remember just because it is not included in GLA does not mean you don't give it value.


The standard is the important part which was indicated in the post Dale posted if you read the FNMA article he posted.

 

[Zoe]

I didn't realize FNMA sent so many letters to state boards on appraisers. Knock on wood.

 

[The Bob]

I have been in this business for 30 years and every blueprint I have ever seen has dimensions to the nearest inch or less (I will see 11 ft 6 1/2 in or 6 1/4). Sometimes they will have different measurements for exterior masonry or without (they will show you 4 1/2 or 5 1/2 inches for masonry). I have seen 1,000's of blueprints and never seen one rounded to the foot or half foot. I have seen several with no dimensions whatsoever, and I requested copies with exterior dimensions and have always got them.

I had a dozy last year that took me over 2 hrs to measure. The agent even called to see if I was OK it was taking so long. I've never seen it before but the blueprints had measurements down the 1/16 and not just a few. Really bizarre.

 

[RCA]

FYI: The latest ANSI Z765 is

"SQUARE FOOTAGE - METHOD FOR CALCULATING ANSI Z765-2021"

You call by phone at 1-800-638-8556 to pay $25 and they email you the PDF (11 Pages).

Notice Section 4, Page 3, "Statement of Finished Square Footage" which gives you some flexibility in deviating from the principle requirements. So, you don't have to be 100% perfect. But, then again, USPAP requires that your report not be misleading and contain "reasonable" assumptions. So, there is that. And don't forget FNMA and other regulations that may be relevant.

And, of course, you can construct your own standards that go further than other published requirements, or lend clarification in those cases where there is ambiguity.

 

[Fernando]

Took class yesterday and someone who knows says FNMA is really considering making ANSI the standard. I didn't know ANSI had changed a little on like upper rooms on outside walls over a garage had changed where you don't include outside wall in that room where the ceiling is sloped and it has no outside wall. The new standard is still the same on ceiling heights and all.

But it is real. They are seriously considering. I look for it to happen. I think that is good for appraisers because there is standard that everybody will do it the same on a room like that. It won't be shoulder height, or knee wall height or any other means. It will be ANSI, which is a standard. If you haven't taken ANSI in a few years, it may be time if you do GSE work. I think the new standards can be bought for $25. Idk if the class provides a copy or not.

The ceiling height limitations will still be the same. It's gonna happen. Somebody is moving your cheese. LOL

Just as I suspected. ANSI is not standard for FNMA.
I'd been measuring and drawing my sketch correctly doing it my way.

 

[sputnam]

The fact that ANSI has not yet been adopted by FNMA as the standard by in no way proves that you've been doing it correctly.

 

[RCA]

The fact that ANSI has not yet been adopted by FNMA as the standard by in no way proves that you've been doing it correctly.

As with many real estate standards ANSI Z765-2021 is not logically perfect. It makes innumerable assumptions, without which there are logical contradictions. There are statements that could be perceived as potential problems in relation to other guidelines and regulations. One area I can see as a problem is the requirement that one half of the attic area must be at least 7 feet high for any of the area to be considered living area. I can think of a number of homes with expensive and high quality living area in the form of "study" or "office" space in a top-level floor with a slanting ceiling, that could be classified under that requirement as not being GLA. I've seen homes where the stairwell comes right up through the center of the house, removing much of the floor area under the center of the top floor, which otherwise would have a rather large floor area and thus reduce the amount of actual floor area with a 7'+ height to less than 50% of the actual floor area. - And yet there remains a rather large area with a height of 7' or higher available for the study - and the lower height level areas are conveniently used to store work papers and books. Oh yes, throw in the ambiguity of whether the stairwell area can be considered part of the "floor located under sloping ceilings." -- So, clarification and adaptation is required. And that takes time.

However, Z765 does clarify many issues, such as whether you include the additional area created by bay windows in the GLA (you don't unless the area is at floor level) and the treatment of area related to stairs. One might add it could be worded more clearly in certain areas, - because appraisers often get the wrong message.

The main problem I run into is determining the area, the degree of finishing and legality of below grade areas in sales comparables, especially where you are running regression on hundreds of properties where you cannot possibly take the time to do a thorough investigation - even if that were possible. It is, generally speaking, not well documented in many areas. And, on the other hand, you do have that information for your subject property assuming you have done a proper interior inspection. The result is that for the subject, you wind up giving the basement area less weight than it deserves - unless it has been declared legal as evidenced by the tax assessor and other records. In which case, it will likely get more weight than it deserves. Even FNMA allows partilallly below grade finished area to be considered living area in some situations. But, truthfully, it is almost never in quite the same league as above grade finished area.